Business Analytics Final Questions

Limited resources are modeled in optimization problems as a. an objective function. b. constraints. c. decision variables. d. alternatives.

b. constraints.

What are the three common elements of an optimization problem? a. objectives, resources, goals. b. decisions, constraints, an objective. c. decision variables, profit levels, costs. d. decisions, resource requirements, a profit function.

b. decisions, constraints, an objective.

Which of the following is true of "What if?" analysis? a. A well-designed spreadsheet facilitates "What if?" analysis. b. It is not very useful when working with non mathematical models. c. "What if?" analysis is an efficient optimization technique. d. "What if?" analysis is useful in creating a well-defined problem statement.

a. A well-designed spreadsheet facilitates "What if?" analysis.

What is the goal in optimization? a. Find the decision variable values that result in the best objective function and satisfy all constraints. b. Find the values of the decision variables that use all available resources. c. Find the values of the decision variables that satisfy all constraints. d. None of these.

a. Find the decision variable values that result in the best objective function and satisfy all constraints.

In the following expression, which is (are) the dependent variable(s)? PROFIT = REVENUE EXPENSES a. Profit b. Revenue c. Expenses d. (b) and (c)

a. Profit

Which of the following is a reason to employ queuing theory? a. To reduce customer wait time in line. b. To reduce service times. c. To generate more arrivals to the system. d. To reduce worker idle time in line.

a. To reduce customer wait time in line.

Which of the following is the common approach to time-series analysis? a. Try several techniques and use the best results. b. Plot the data and count the peaks to determine a value for k. c. Plot the data and use the TREND() function. d. Use a stationary model since it is the most robust.

a. Try several techniques and use the best results.

The best models a. accurately reflect relevant characteristics of the real-world object or decision. b. are mathematical models. c. replicate all aspects of the real-world object or decision. d. replicate the characteristics of a component in isolation from the rest of the system.

a. accurately reflect relevant characteristics of the real-world object or decision.

A course of action intended to solve a problem is called a(n) a. alternative. b. option. c. decision. d. criteria.

a. alternative.

The number of units to ship from Chicago to Memphis is an example of a(n) a. decision. b. constraint. c. objective. d. parameter.

a. decision.

Given an objective function value of 150 and a shadow price for resource 1 of 5, if 10 more units of resource 1 are added (assuming the allowable increase is greater than 10), what is the impact on the objective function value? a. increase of 50 b. increase of unknown amount c. decrease of 50 d. increase of 10

a. increase of 50

A mathematical model is considered to be "valid" when a. it accurately represents the relevant characteristics of the object or decision. b. it has passed a validation test. c. it replicates all aspects of the object or decision. d. the left-hand and right-hand sides of expressions are equal.

a. it accurately represents the relevant characteristics of the object or decision.

The decision rule which determines the maximum payoff for each alternative and then selects the alternative associated with the largest payoff is the a. maximax decision rule. b. maximin decision rule. c. minimax regret decision rule. d. minimin decision rule.

a. maximax decision rule.

Seasonality in a time series is indicated by a. regular, repeating patterns in the data around a trend line. b. regular patterns in the data around a trend line. c. irregular patterns in the data around a trend line. d. random patterns in the data around a trend line.

a. regular, repeating patterns in the data around a trend line.

As the number of periods in the forecast, k, increases a. the moving average prediction will be smoother. b. it is harder to get a good forecast. c. the forecast will respond more quickly to changes in the data. d. the moving average will increase in value.

a. the moving average prediction will be smoother.

Binding constraints have a. zero slack. b. negative slack. c. positive slack. d. surplus resources.

a. zero slack.

The following linear programming problem has been written to plan the production of two products. The company wants to maximize its profits. X1 = number of product 1 produced in each batch X2 = number of product 2 produced in each batch MAX: 150 X1 + 250 X2 Subject to: 2 X1 + 5 X2 ≤ 200 − resource 1 3 X1 + 7 X2 ≤ 175 − resource 2 X1, X2 ≥ 0 How many units of resource 1 are consumed by each unit of product 1 produced? a. 1 b. 2 c. 3 d. 5

b. 2

In a two-group discriminant analysis problem using regression, why is the midpoint cut-off value used to determine group classification? a. Because the value minimizes the absolute misclassification error. b. Because the value minimizes the probability of misclassification error. c. Because the value represents an equal division between the groups. d. Because the value incorporates problem specific knowledge.

b. Because the value minimizes the probability of misclassification error.

A manager has only 200 tons of plastic for his company. This is an example of a(n) a. decision. b. constraint. c. objective. d. parameter.

b. constraint.

Regression analysis is a modeling technique a. that assumes all data is normally distributed. b. for analyzing the relationship between dependent and independent variables. c. for examining linear trend data only. d. for capturing uncertainty in predicted values of Y.

b. for analyzing the relationship between dependent and independent variables.

The decision with the smallest expected opportunity loss (EOL) will also have the a. smallest EMV. b. largest EMV. c. smallest regret. d. largest regret.

b. largest EMV.

A common objective in the product mix problem is a. maximizing cost. b. maximizing profit. c. minimizing production time. d. maximizing production volume.

b. maximizing profit.

A variable whose value cannot be predicted or set with certainty is a a. discrete variable b. random variable c. realistic variable d. simulation variable

b. random variable

The ________ indicates how much the value of the objective function will change as the right-hand side of a constraint is increased by 1. a. objective coefficient b. shadow price c. binding constraint d. reduced cost

b. shadow price

The allowable increase for a constraint is a. how many more units of resource to purchase to maximize profits. b. the amount by which the resource can increase given shadow price. c. how much resource to use to get the optimal solution. d. the amount by which the constraint coefficient can increase without changing the final optimal value.

b. the amount by which the resource can increase given shadow price.

The standard error measures the a. variability in the X values. b. variability in the actual data around the fitted regression function. c. variability in the independent variable around the fitted regression function. d. variability in the dependent variable around the fitted regression function.

b. variability in the actual data around the fitted regression function.

Which of the following best describes queuing theory? a. The study of arrival rates. b. The study of service times. c. The study of waiting lines. d. The evaluation of service time costs.

c. The study of waiting lines.

A square node in a decision tree is called a(n) ____ node. a. chance b. random c. decision d. event

c. decision

A payoff matrix depicts ____ versus ____ with payoffs for each intersection cell. a. decision criteria; states of nature. b. decision alternatives; potential outcomes. c. decision alternatives; states of nature. d. decision criteria; potential outcomes.

c. decision alternatives; states of nature.

In a spreadsheet, input cells correspond conceptually to a. dependent variables. b. functions. c. independent variables. d. output cells.

c. independent variables.

The amount of time a customer spends with the server is referred to as a. system time. b. queue time. c. service time. d. served time.

c. service time.

A time series which has no significant upward or downward trend is referred to as a. static. b. non-moving. c. stationary. d. non-stationary.

c. stationary.

The objective function for a LP model is 3 X1 + 2 X2. If X1 = 20 and X2 = 30, what is the value of the objective function? a. 0 b. 50 c. 60 d. 120

d. 120

How many decision variables are there in a transportation problem which has 5 supply points and 4 demand points? a. 4 b. 5 c. 9 d. 20

d. 20

Why might a forecaster calculate MSE values on just the most recent data in the time-series data set? a. The forecaster might be interested in how well the forecasting method performs on the more recent data. b. Because the most recent data may be a better predictor of future values. c. Because the resulting forecasting function might fit the older data better that the more recent data. d. All of these.

d. All of these.

A(n) ____ is a course of action intended to solve a problem. a. decision b. criteria c. state of nature d. alternative

d. alternative

Decision variables: a. cannot be directly controlled by the decision maker. b. are assumed to be constant. c. are always uncertain. d. can be selected at the discretion of the decision maker.

d. can be selected at the discretion of the decision maker.

A circular node in a decision tree is called a(n) ____ node. a. chance b. random c. decision d. event

d. event

The constraints X1 ≥ 0 and X2 ≥ 0 are referred to as a. positivity constraints. b. optimality conditions. c. left hand sides. d. nonnegativity conditions.

d. nonnegativity conditions.

A change in the right hand side of a constraint changes a. the slope of the objective function b. objective function coefficients c. other right hand sides d. the feasible region

d. the feasible region